With OPEC cutting production for the first time in years, demand increasing and very few new oil discoveries, the prospects for crude pricing continues to look bright for 2017 and beyond. While the halcyon days of $100 per barrel probably won’t be returning anytime soon, there’s a decent chance oil could be in the mid-$60s by 2018. Compared with the $26 level and the doom and gloom from just one year ago, that is music to the ears of investors.

One area that continues to remain a favorite for investors is the low-cost Permian Basin out in west Texas and New Mexico. The region has produced over 29 billion barrels of oil since output began in 1921, and despite that incredible production history, its best days could lie ahead. Some top analysts believe that the United States now holds more oil reserves than Saudi Arabia, thanks in large part to the Permian.

We screened the Deutsche Bank coverage universe for companies that have big exposure to the Permian and were rated Buy, and we found three outstanding stocks to buy now.

Concho Resources

Besides being one of the top energy plays in the Permian Basin, this is also a Wall Street favorite. Concho Resources Inc. (NYSE: CXO) is an independent oil and natural gas company engaged in the acquisition, development and exploration of oil and natural gas properties. Its principal operating areas are located in the Permian Basin of southeast New Mexico and West Texas. As of December 31, 2015, its total estimated proved reserves were 623.5 million barrel of oil equivalent.

The company is targeting to deliver 20% oil production growth this year, while investing within its cash flow, a move that many on Wall Street see as very positive. By carefully managing growth and spending, the company looks to be in position to restart the double-digit production growth next year, while many peers are struggling to generate enough excess cash flow to boost output.

The Deutsche Bank price target for the stock is $170, and the Wall Street consensus target is $161.91. Shares closed Monday at $141.58.

Diamondback Energy

This is another favorite of Wall Street analysts and another top Permian Basin play. Diamondback Energy Inc. (NASDAQ: FANG) is an independent oil and natural gas company headquartered in Midland, Texas, and focused on the acquisition, development, exploration and exploitation of unconventional, onshore oil and natural gas reserves in the Permian Basin. Diamondback’s activities are primarily focused on the horizontal exploitation of multiple intervals within the Wolfcamp, Spraberry, Clearfork and Cline formations.

Wall Street analysts have noted in the past the company’s top-tier asset base, solid accretive additions and financial discipline, which they think allows for not only continued solid cash flow, but could put the company in play as a takeover target. Diamondback continues to drill some of the most economical wells in the United States as efficiencies improve, costs decrease and activity remains in the better regions.

Earnings estimates for the company continue to go higher, and many on Wall Street feel Diamondback can deliver total 2017 numbers that come in above current consensus estimates.

Deutsche Bank has a $128 price target. The consensus target is $126.10, and shares closed Monday at $105.44.

RSP Permian

This company was one of the production growth leaders in the region over the past two years. RSP Permian Inc. (NYSE: RSPP) is an independent oil and natural gas company focused on the acquisition, exploration, development and production of unconventional oil and associated liquids-rich natural gas reserves in the Permian Basin. The vast majority of the company’s acreage is located on large, contiguous acreage blocks in the core of the Midland Basin, a subbasin of the Permian.

The company caught a string of upgrades from top Wall Street companies last year and many have pointed to the possibility that the company may very well be a potential takeover candidate. Historically a vertical producer, the company has been transitioning to horizontal drilling the past few years. RSP Permian has conducted five acquisitions since its initial public offering in early 2014 and currently has 1,700 horizontal locations across eight prospective zones.

The company posted solid earnings for the third quarter, and much of Wall Street is focused on the integration of the company’s recently acquired Delaware Basin acreage. The company will report fourth-quarter numbers in late February.

The $54 Deutsche Bank price target compares with the consensus target of $52.75. Shares closed most recently at $42.05.

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With the industry looking to the Permian Basin to provide annual production growth, the analysts do acknowledge that challenges such as higher service costs remain in place. However, they also feel that the environment remains favorable for margin improvement and cash flow growth.

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